Legal Question in Business Law in Maryland

Re: Wage and Hour, Loan and Salary claim as former business partner

Question 1: What can I claim from the Company keeping in mind that there was no written agreement for employment? I used the title of President, to get the company, many customers. I have the two years of email record proving that I was working for the company.

Answer: Maryland recognizes the theory of oral contracts. You can claim there were several oral contracts - one for the loan, one for the products, and one for the wages. If you sue under the Wage Payment and Collection Law you can request attorney's fees. The court may award an employee an amount not exceeding 3 times the wages due, reasonable counsel fees and other costs. Please note there is other information, not provided in your question, that a court would need to determine the terms of an oral contract.

Question 2: Company wants me to sign 3 years no-compete agreement just to return my loan. Loan and labor is written in the company books.

It is unclear whether the document you have been requested to sign would be considered a "reasonable" non-compete agreement. In general, Maryland courts will enforce non-competes, but only if, upon a review of the particular facts of the case, the court finds that the non-compete is "reasonably necessary to protect the employer's business" and if the non-compete "does not impose undue hardships on the employee or the public." Intelus Corp v. Barton and Medplus, 7 F.Supp. 2d 635, 641, 643 (D. Md. 1998). Non-compete agreements are based on fiduciary duty of an employee to an employer.

In your case, however, you have not been compensated as an employee would. Compensation is a necessary requirement in a contract, especially a non-compete agreement. Secondly, it sounds like you had contact with these clients prior to your endeavor with fiberoptic company. Some Maryland courts have considered such previous contacts to be outside the scope of an non-compete agreement. You should consult a legal professional about negotiating what is more likely to be release and hold harmless agreement rather than a non-compete agreement.

Ms. D'Souza understands this information is dessimated to the general public. Please note these statements are offered for informational purposes only; they are not offered as and do not constitute legal advice. Any reviewer of this information should seek professional counsel. Any application of the information provided is dependent upon specific facts and circumstances of individual situations.

Transmission of information is not intended to create, and its receipt does not constitute an attorney-client relationship. If you would like to discuss an issue, please contact Ms. D'Souza directly so that an attorney-client relationship may be properly established.

Re: Wage and Hour, Loan and Salary claim as former business partner

You're certainly entitled to repayment of the loan, and there appears to be no dispute as to that. With regard to compensation, the difficulty arises from the lack of any written agreement spelling out your role with the company. Your "partner" is probably going to claim that both of you were owners of the business, not employees. As such, you're entitled to share in company profits, but not necessarily to a defined salary as such. Did he take profits from the business during your tenure? If so, it enhances your claim for the same. If you contributed labor but he didn't, you could argue that he was unjustly enriched by your contributions and you are entitled to compensation for making the company successful. You will probably have to file suit to get any response to your claim. Finally, if you have any interest in staying in the industry, you shouldn't sign the no compete agreement--you shouldn't have to do this as a condition of loan repayment.